Congress Should Withhold Funds from the UN Relief and Works Agency for Palestine Refugees (UNRWA)

The victory of
Hamas in the recent Palestinian elections should force a wholesale
reappraisal of U.S. and international funding for the Palestinian
Authority (PA). Hamas is one of the most brutal and barbaric
terrorist movements in modern history, being responsible for the
murder of hundreds of Israeli, Palestinian, and American civilians
and the maiming of thousands more. The United States and the
European Union should refuse to fund a Palestinian regime that does
not recognize the state of Israel and that actively supports the
use of terrorism.[1]

The U.S. and EU
should also withhold all funding from the United Nations Relief and
Works Agency for Palestine Refugees in the Near East (UNRWA) and
call for an immediate inquiry into how it has been spending donors'
money as well as allegations that it has hired members of terrorist
organizations and stoked anti-Semitism among Palestinian refugees.
Without this step, there is a major risk that a Hamas-led PA will
exploit UNRWA to further its anti-Israel agenda.

U.S.Funding for the Palestinian Authority and UNRWA

The Palestinian
Authority is hugely dependent upon foreign assistance, which
accounts for about 66 percent of its annual budget. European Union
funding for the PA amounted to $600 million in 2005.[2]
The United States gives $70 million directly to the PA each year,
as well as $225 million for humanitarian projects through the U.S.
Agency for International Development (USAID).[3]
Between 1993 and 2004, the Palestinian Authority received $6.93
billion in aid from the international community.[4]

In addition to
this direct funding of the PA, the U.S. and other nations give
generously to UNRWA. In 2004, the U.S. pledged a total of $127
million.[5]
The U.S. provides roughly a quarter of UNRWA's regular annual
budget and is the agency's biggest donor. The State Department's
Bureau of Population, Refugees, and Migration has given over $300
million to UNRWA since 2001.[6]
According to the Palestinian Authority Ministry of Finance, UNRWA
received an astonishing $3.95 billion in international funding
between 1993 and 2004.[7]

New legislation
put forward in the House of Representatives by Rep. Ileana
Ros-Lehtinen (R-Fl) would de-fund the Palestinian Authority, an
important step in the right direction. Her bill designates the PA
as a "terrorist sanctuary" and would "prohibit direct assistance to
the PA, the Palestinian Legislative Council, municipalities, and
other constituent elements that are 'governed' by individuals
associated with Hamas or other terrorist entities."[8]
Rep. Ros-Lehtinen's leadership on this issue sends a powerful
signal from Capitol Hill that the United States will not allow its
funds to be appropriated by terrorist groups.

Congress must also
insist that international agencies that rely so heavily on U.S.
funding and that will interact with the new Hamas regime be free of
the taint of terrorist infiltration and operate in an accountable
and transparent manner. Hamas has a long history of diverting funds
from charitable organizations and abusing humanitarian fundraising
to support its terrorist agenda.[9]
It should not be allowed to subvert UNRWA or other groups to
advance its radical Islamic goals.

The United States
should send a clear message to UNRWA and other international bodies
that their operations in Hamas-held territory and Palestinian
refugee camps outside the Palestinian territories will be subject
to intense scrutiny. In light of the Hamas election win, Congress
and the Bush Administration should withhold U.S. funding for UNRWA
while the agency's finances are audited and alleged links between
the agency and Hamas terrorists are thoroughly investigated.[10]
Washington must make every effort to ensure that taxpayer money is
not being used for terrorist operations or political purposes. To
this end, the amended 1961 Foreign Assistance Act directs that:

No
contributions by the United States should be made to [UNRWA] except
on the condition that [UNRWA] take all possible measures to assure
that no part of the United States contribution shall be used to
furnish assistance to any refugee who is receiving military
training as a member of the so-called Palestine Liberation Army or
any other guerrilla type organization or who has engaged in any act
of terrorism.[11]

In addition to
withholding funds, the United States should also state publicly
that UNRWA, founded in 1949, is a costly anachronism that must be
shut down in the near future, leaving its operations to the United
Nations High Commissioner for Refugees (UNHCR). It is striking that
UNRWA, with a staff of 24,300, had a regular budget in 2005 of $339
million to support 4.1 million refugees in just five territories[12]
(or $83 per refugee),[13]
while UNHCR, with a staff of 6,450, had a 2005 regular budget of
$992 million to support 19.2 million refugees and asylum seekers in
116 countries (or $52 per refugee).[14]
UNRWA cannot justify its long-term existence as a separate entity
on grounds of fairness, cost, or efficiency.

UNRWA and Hamas

Like most UN
agencies, UNRWA is subject to little external oversight and minimal
public scrutiny. For an agency that receives over a third of a
billion dollars in public funding every year, it is extraordinarily
opaque. Its website provides few specific details as to where the
money goes and how it is spent. The agency is not externally or
publicly audited. This is particularly troubling for an
organization that has been so dogged by controversy.

There are serious
allegations that UNRWA has been infiltrated by Hamas terrorists.
According to the U.S. Government Accountability Office (GAO), as of
November 2003 at least 16 UNRWA staff had been detained by Israeli
authorities for security-related crimes, and three had been
convicted in military courts of terrorism-related activities.[15]

UNRWA's leadership
has admitted in the past that Hamas has people working inside the
UN agency. Peter Hansen, then-Commissioner-General of UNRWA,
sparked a political storm in 2004 when he remarked in an interview
with the Canadian Broadcasting Corporation: "I am sure that there
are Hamas members on the UNRWA payroll, and I don't see that as a
crime. Hamas, as a political organization, does not mean that every
member is a militant, and we do not do political vetting and
exclude people from one persuasion as against another."[16]
(Hansen left the agency in March 2005 and was replaced by Karen
Koning Abuzayd.)

Following Hansen's
remarks, a bipartisan group of 37 Members of Congress led by
Representative Eliot Engel (D-NY) called on the U.S. government to
pull funding for UNRWA "until all members of terrorist
organizations are removed from the Agency's staff." In a letter to
then-Secretary of State Colin Powell, the Members noted: "[N]ot
only have many of the suicide bombers of Hamas and other
Palestinian terror organizations come from UNRWA refugee camps, but
students in UNRWA schools have received a steady diet of hatred and
anti-Semitism in their textbooks. Furthermore, reports widely
indicate that terrorists have taken advantage of the limited
restrictions Israel places on humanitarian vehicles, including the
use of ambulances and other UN vans for illicit purposes."[17]

That letter is no
less relevant today, especially in light of Hamas's election win.
Congress must increase its pressure on UNRWA funding, and the Bush
Administration should use that threat to push for immediate reform
and improved oversight of one of the UN's biggest agencies.

Key
Recommendations

Push for a
full audit of UNRWA. The United States should withhold all
funding to UNRWA and insist on a comprehensive external audit of
its finances and expenditures. The U.S. should also call for an
independent investigation of links between UNRWA employees and
Hamas or other terrorist groups, as well as allegations regarding
the misuse of funds and the promotion of anti-Semitism. In
addition, Congress should direct the GAO to conduct a new inquiry
into how UNRWA is spending U.S. funds.

End the UNRWA
dependency culture. Long-term U.S. policy in the West Bank and
Gaza should aim to encourage individual empowerment, private
investment, and free enterprise. Agencies such as UNRWA perpetuate
a culture of welfare dependency among impoverished Palestinians,
who largely depend upon handouts from international organizations.
The United States should support the downsizing, streamlining, and
eventual closure of the 56-year old UNRWA, setting a clear sunset
date for any future U.S. funding for the agency.

UNRWA was established to aid Palestinian refugees pending a
solution to the Israeli-Palestinian conflict. If the new
Palestinian regime rules out a negotiated solution to that
conflict, then the international community should insist that the
new government take full responsibility for the refugees, whom it
dooms to continued misery by blocking a peaceful solution.
Maintaining international funding for the refugees while the
Hamas-controlled Palestinian Authority rejects peace would amount
to an international subsidy for a jihad against Israel.

Call for the
EU to end its support of the Palestinian Authority. The United
States should call on the European Union to end its support of the
Palestinian Authority, which would otherwise provide a lifeline to
a terrorist regime that appears unwilling to drop its vicious
ideology. Washington should also call for a joint U.S.-EU inquiry
into the fate of the billions of dollars of Western aid money that
has been pumped into the PA over the past decade.

No U.S. Money for
Terrorists

As a major UN body
with a huge budget, the United Nations Relief and Works Agency for
Palestine Refugees should operate in a transparent and accountable
manner. It must also remain politically neutral and must not aid
terrorist groups and their supporters. There is a real danger that
Hamas will exploit UNRWA as a lucrative cash cow to advance its
anti-Israeli agenda.

Until it can be
absolutely verified that UNRWA is being run in an effective,
neutral, and accountable manner and that it will not be used by the
new Hamas regime to pursue terrorism or spread anti-Semitism, the
United States should withhold funds from the organization.

With the impetus
from Congress, the Bush Administration should state clearly that
UNRWA's operations must ultimately be taken over by UNHCR and that
UNRWA should cease to exist as an independent agency within a few
years.

Nile
Gardiner, Ph.D., is the Bernard and Barbara Lomas Fellow in the
Margaret Thatcher Center for Freedom, and James
Phillips is Research Fellow in Middle Eastern Affairs in the
Douglas and Sarah Allison Center for Foreign Policy Studies in the
Kathryn and Shelby Cullom Davis Institute for International
Studies, at The Heritage Foundation. The authors are grateful to
Brett Schaefer, Research Fellow in International Organization
Affairs, and James Dean, Deputy Director of Government Relations
for Foreign and Defense Policy, at The Heritage Foundation, for
their advice and suggestions. Ewan Watt assisted with research for
this paper.

[8]
See Meghan Clyne, "Congress Racing to Isolate Hamas Regime," The
New York Sun, January 30, 2006.

[9]
See, e.g., "The Role of Charities and NGOs in the Financing of
Terrorist Activities," Hearing Before the Subcommittee on
International Trade and Finance of the Committee on Banking,
Housing, and Urban Affairs, United States Senate, August 1, 2002,
at /static/reportimages/2C55977E7F208AD467D96BB6244A5AD7.pdf.

[10]
For background on the charges against UNRWA, see Joshua Muravchik,
The Future of the United Nations: Understanding the Past to
Chart a Way Forward (AEI Press, 2005), p. 64.

[11]
Section 301(c) of the 1961 Foreign Assistance Act, (PL-87-195),
amended, as cited in Government Accountability Office, "Department
of State and United Nations Relief and Works Agency Actions to
Implement Section 301(c) of the Foreign Assistance Act of 1961,"
November 17, 2003, p. 3, at /static/reportimages/118F6CB40B3CE8932C83C2141D8F4060.pdf.

[12]
The territories are the West Bank, Gaza, Jordan, Lebanon, and
Syria. Fully 99 percent of UNRWA's employees are Palestinians. The
agency has 98 international staff posts.

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